Binary Options Trading
Binary options trading is a method of earning money that became available for everyone through the help of information technologies, particularly the Internet.
Among other types of income in the global Internet, financial trading can be allocated, because it is trading on the stock exchange. This kind of financial trading favorably differs from the trading of binary options. This approach to stock trading has become the most popular due to the process’s high profitability, accessibility and simplicity.
What are binary options and how do you make money on them?
First of all, you need to understand that a binary option is a type of exchange contract that is used to make a profit on the price movements of assets (currencies, stocks, products) in global financial markets.
Income from binary options depends not only on the price of a financial asset but also on a correct forecast, made by the market’s participant. If you want your contract to make some profit, you will need to determine the direction of movement of the price of the selected asset until the completion of the transaction. That is, you choose the time interval after which the price of the selected asset will be higher or lower than the current one. If you make a correct forecast, you earn about 85% (the rate depends on the broker) from the investment; otherwise you lose all the investment in the option. This tool is very convenient for hedging the risks of using other types of trade in the financial markets, for example, the Forex market.
Basic terms in the trading of binary options
Asset – currency pairs, indices, products, shares or other securities, on which it is possible to conclude contracts for purchase or sell (PUT or CALL).
PUT option – the deal for purchase of the option to decrease the value of the selected asset, which is issued if you expect a price reduction.
CALL option – deal for the purchase of the option to increase the value of the selected asset, which is issued if you expect the growth of the price.
One touch or OneTouch – deal for the purchase of the option where the price reaches a certain level (One Touch) or does not achieve it (No Touch) before the expiry.
Expiration – the time of the expiration date of the option, where the result is fixed on the contract.
In/Out-options – deal for the purchase of the option, in which the corridor is predicted; the price will move until the expiration (In option) in this corridor or output the price within the corridor (Out option).
Timeframe – is the time interval on the price chart.
Trading of binary options an affordable way of earning through the Internet
Many experts say that today’s binary options are the most profitable way of earning. They explain that if you want to receive a large and predetermined profit before you begin to trade, you need to define correctly the estimated direction of movement of an asset.
The uniqueness of this type of income is that you can get your profit fairly quickly. There is no need for long wait times as in anticipation of the charging of interest on a bank deposit. You can choose the time after which the system will check the forecast on the price movement of the asset.
First of all, you need to understand that binary options are not something magical that can quickly make millions without risk. It is possible to earn a large amount, and quite quickly, but it is fairly complicated and has certain risks. To obtain earnings without losses, it is necessary to learn how to predict market movements and correctly calculate the direction of change of the value of the asset.
Believe us, it is not as easy as it may seem.
What is the difference between trading binary options and trading in the Forex market?
Binary options and Forex trading surely have a significant difference. This consists mainly of the fact that in order to make profit on the Forex market, you have to ensure that quotes go in the direction of your prediction ofora significant number of points, and then you have to close the deal (full truth about Forex)! But with binary options trading, everything is different – the number of points is not important. Just one item that passes by the price in the direction of forecast will be enough for you to receive the full profit! The time of completion of the option (expiration) is known in advance, whereas in the Forex market, you set the time, so there is a risk of an unplanned significant loss. But this lossis excluded with binary options: you can’t lose more bets.
Why do you need a broker?
Before you start trading activities, you must open your trading account. You need a binary options broker for this.
A broker is a legal entity – a company that provides you with access to the financial market, where you, as a trader, carry out all the operations alone. It would be better to call the company brokerage services. This is quite a big difference. Brokers can be divided into two categories: brokers that execute transactions on behalf of the client and at the expense of the client and brokers that operate on their own, but at the expense of client. The second category is often some large financial corporation in which clients are investors and receive a percentage of the total profits of the company. But the first category is the companies whose services we use in the trading of binary options.
Platform for binary options trading
The platform is a trading terminal through which you can trade binary options anywhere and at any time. The right choice for a trading platform opens up all of the features and presets for comfortable trading. A good platform is characterized by the following:
- Quotes of the asset are presented in a large window, which helps to analyze the quotes;
- You can choose between linear and candle charts of quotes;
- It is desirable that the platform has been integrated with technical indicators through which you can create your own trading strategies;
- Profitability of options should be not lower than 85%;
- The price chart can be replayed in the trade analytics history to review the strategies, with zoom in, zoom out, etc.
Trade in binary options on Android and Apple
Traders have the opportunity to engage in optional trade without being tied to the computer. There have been mobile versions of the trading terminals in the market for a long time; through these you can carry out the trading of binary options anywhere via an Internet connection. The main difference between mobile trading and a regular trading platform is that with the mobile option, the trading platform tool will always be in your pocket!
In general, the mobile platform is just a comfortable way of having the standard platform of the broker in the palm of your hand.
Money management in the trading of binary options
The money management involves optimal and accurate strategic financial management to provide the largest possible profit. It is a science that teaches effective management of the deposit for profitable trading in the long term.
Successful trades are ensured by the adherence to one main recommendation; it is not necessary to conclude transactions that exceed five percent of your deposit.
How can you trade in binary options?
When getting started with binary options trading, you need to analyze and study the theory. For a reasonable trade, you shouldn’t move away from a simple set of rules:
1) Find complete information about binary options. Don’t think that these earnings are easy for lazy people to obtain. You should learn the theory and then you can try everything on demo practice.
2) Don’t throw all your money into trading. This is unwise. Start with «cents» and practicing on a demo account. Play it safe and take your time.
3) Choose your broker carefully. You should read reviews first and find out all of the trading conditions and what kind of services you can get from the selected company.
4) Never give your money to brokers to use on their own. The brokers are not even allowed to advise traders about anything; nor are they allowed to personally open deals from customer accounts. If you get a doubtful proposal, take your deposits and walk away without turning back.
5) When you have saved up a little money on your account, try to withdraw it. This will give you a chance to become calm and to check the honesty of the company.
6) Always remember: the deposit can be lost. Get used to this fact. If you can’t get used to it, put your money in your bank account. It will be much safer.
What is binary options trading? Is it a scam or for real?
Your activity in the financial markets won’t enable you to get rich in an instant. To earn money, you will have to work hard for a long time.
Based on the fact that binary options in the stock market are used equally with other types of trade, they fall under the legal control of the regulators of different countries. Among them, the most famous regulatory company is CySEC. There are also other companies such as FCA, NFA, FSA, ESMA, CFTC, ASIC, SIBA.
The reliability of binary options is also confirmed by the large and relevant governmental financial organizations of the countries with the most developed economies.
As far as we know, the binary options market is not regulated in the CIS. At the moment, the legislation doesn’t define the organs and mechanisms of regulation for binary options by the government of Russia and the former countries of the Soviet Union. That is why a nonstate organ currently performs the regulatory functions for the options market of the CIS – FMRRC (Center for the Regulation of Financial Markets).
How can you start trading in binary options?
1) You should explore the types of options.
2) You should estimate the current situation on the market relative to your chosen asset.
3) Find out methods for determining the contract price.
4) Find out all of the advantages with binary options compared to traditional ways of earning money. You can also read about the benefits here.
5) Make an accurate calculation of the operating expenses.
Is it possible to make money from scratch?
Yes, it is! If you want to do this, you need «to keep your finger on the pulse» and follow the news about the shares held by various brokers. Very often, traders are provided with a special promotion that allows you to try your hand at binary options trading on a real account and with real money – in other words, you are given the chance to try first without actual investing.
How much can you earn with binary options?
The value of possible earnings with binary options – the question is rhetorical and, although it is not a completely accurate answer, we will try to give you some advice that can help you earn quite a lot!
Honestly, the question is not quite correct. You can earn as much as you want! You should probably ask a different question – what do you need to do to earn a lot?
How do you trade in binary options?
There are a few success stories related to binary options; when you study this, you will be able to understand more about trading in binary options:
My success story – how can you earn with binary options
Case for earnings on Binomo